Cooperation Seen on Bethlehem Steel Deal

Published 7:00 pm, Monday, January 6, 2003

AP Business Writer

The buyout of bankrupt Bethlehem Steel Corp. was the result of unusual cooperation by management and the workers' union, which agreed to job cuts called for under the deal.

The plan to buy Bethlehem's plants and keep them running probably will cost one-third to one-half of the jobs left at the company, but is still better than seeing the plants shut down, United Steelworkers union officials said Tuesday.

That's a changed attitude by a union that decades earlier might have rejected any suggestion of job cuts, brought about by seeing the U.S. steel industry battered by repeated plant closings, labor historian John Hinshaw said.

In the 1970s, organized labor might have accused management of lying, said Hinshaw, an assistant professor of history at Lebanon Valley College in Annville, Pa. "Everybody now knows they're not lying."

Union President Leo Gerard disputed the notion that the cooperative attitude was unusual. "It depends where you're coming from," he said. "There are a lot of labor-management cooperative work practices in pretty much all of the steel industry."

He said the difference that may save some Bethlehem Steel workers' jobs is the approach to steelmaking by recently formed ISG.

The group was created last year by Wilbur L. Ross Jr., a Wall Street financier who has been involved in some of the largest U.S. bankruptcy restructurings, including Texaco, Continental Airlines, TWA and Revco. Ross also has taken over failed investment companies in South Korea and Japanese banks.

Ross' company, WL Ross & Co., got into the steel business by buying the liquidated assets of bankrupt LTV Steel last April, reviving the company and renaming it International Steel Group. The Bethlehem Steel purchase would vault ISG ahead of U.S. Steel as the nation's largest integrated steelmaker.

"What's unusual is ISG has taken a very open and constructive approach to its relationship with the union," Gerard said.

The Steelworkers union reached a tentative contract with ISG in December that company and union officials said would be a model for an agreement with the Bethlehem Steel employees.

Gerard disputed analysts' estimates that employment at the Bethlehem plants would be cut from one-third to one-half. "Most of them never saw the inside of a steel mill," he said.

ISG and Bethlehem Steel officials also said staffing plans were still being developed, although Robert S. Miller Jr., Bethlehem Steel's chairman and chief executive officer, noted that ISG cut employment about 40 percent when it took over the LTV mills.

"We're moving toward a more self-directed work force," he said. "You need to use the minds and brains and creativity of our work force, and sort of de-bureaucratize the workplace."

Jacqueline Jones, a Brandeis University history professor, said unions that once would have opposed job cuts more aggressively have no choice but to cooperate. "We see this as an example of labor on the defensive," she said. "Heavy manufacturing has declined dramatically over the last half century."

Gerard acknowledged that the union can't insist on staffing levels of the past.

"Technology replaces labor, that's a given economic fact," he said. "The only way you can do things is produce more with fewer workers. We had 300,000 workers at Bethlehem, today there are 12,000.

"Those people left as result of closures, as a result of productivity," Gerard said. "If there is any manufacturing industry where there are more workers today than 10 years ago I'd like to know."